Being fully aware of past and current debt can help you control incurring new debt that cannot be managed. But now it is time to work on fixing your score for a solid future. The following advice can greatly help you rebuild your credit rating.
If you have credit cards with balances that are greater than fifty percent of the maximum, you should pay those down as quickly as possible. It’s best to keep all of your credit cards below the fifty percent mark! Creditors like to see you using your accounts, but still keeping your balances under 50% of your allotted credit.
Credit Score
It is easy to get a mortgage for a house if your credit score is good. Making regular mortgage payments will also help your credit score. When you are a home owner you will be financially stable based on what you own. Having a good credit score is important if you need to take out a loan.
Think about getting an installment account to save money and improve your credit score. An installment account requires a monthly payment, make sure you can afford it. If you use one of these types of accounts, your score will quickly improve.
Interest Rates
Excessive interest rates can be contested. However, it is best not to sign contracts containing them in the first place. Creditors are skirting a fine line of law when they try to charge you exorbitant interest rates. Remember that you agreed to pay that interest when you signed the contract. Should you sue any creditors, it is important to push the fact that the interest rates are outrageously high.
If credit repair is something you are investigating and a company has told you they can strike true, but negative, information off of your credit report, they are lying. Bad marks on your report will not go away for seven years. Items that you can get taken off your record are those that have been reported incorrectly or unfairly.
Be very wary of programs that do not sound legal; chances are they aren’t. The web is full of scams that show you how you can craft a deceptive credit file. These scams are not legal and there will be repercussions. The legal consequences are expensive, and you might be sentenced to jail.
Prior to agreeing to a debt settlement agreement, find out how that process is going to impact your credit score. Some debt settlements are better than others. Do your homework and find out how your score will be impacted before agreeing to anything. They do not worry about how your credit score looks; they want to get money.
When you get your monthly credit card bill, check it over to see if there are any mistakes. if you find any, then you need to get in touch with the company right away so this does not become a blemish on your credit record.
If you are able to get a payment plan worked out with any of your creditors, make sure you get the terms in writing. This is for your protection. It allows you to have valid documentation of the terms in the event that a creditor reneges on its offer or changes owners. When you pay it off, send a written copy of proof of payment to all three credit reporting agencies.
This will make sure that you maintain a good credit status. Every late payment appears on a credit report, and could potentially hurt your chances at a loan.
Lower the debt on revolving credit accounts, like store and credit cards, first. You can up your credit rating just by paying down your balances. The FICO system will make a note when the balances are at 20, 40, 60, 80 and 100 percent of the total credit available.
Credit cards should be avoided. Stick to your budget by only spending the cash that you have allocated for spending. If the purchase you’re buying is more than you can currently afford you can use a credit card, but pay it back as soon as possible.
Collection Agencies
One of the most stressful aspects of handling bad credit is dealing with debt collection agencies. Consumers can legally issue letters to collection agencies to cease and desist if they are being harassed. These letters will discourage contact from collection agencies. This doesn’t let the customer off the hook for the debt, it merely stops the threatening calls.
When you need to repair your credit score, be wary of lawyers and law offices that advertise instant credit fixes. There are a lot of scam lawyers out there who will charge you a lot of money for credit restoration techniques that don’t really do much. Research any lawyer who claims to help repair credit before getting in touch with them for help.
In truth, as you will see, credit restoration is mostly about common sense. This information puts the lie to that notion, so start repairing your credit today.
